Transcript Comparison Shopping 2.2.1 - Quaker Valley School District

Comparison Shopping 2.2.1
“Get Ready to Take Charge of Your Finances”
2.2.1.G1
What are your spending habits?
• Think about the last item you purchased
– Did you look at the product carefully, or consider other
options before purchasing it?
– Did you buy the first thing you saw?
•
•
•
•
Based on size?
Based on color?
Based on price?
Compare products?
• Are you an impulse shopper or a
comparison shopper?
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
Shopping Habits
• Impulse Buying
– Unplanned buying
– Little consideration of the product or other options
– “emotional buying”
• Comparison Shopping
– Planned buying
– Careful consideration of the product, features, price and
quality
– “rational buying”
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
Comparison Shopping
• Benefits of comparison shopping
– Buy the same product or service for less money
– Buy more goods and services with the same amount of
money
– Buy a better quality product for the same amount of money
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
Comparison Shopping Steps
• Step One
– Decide exactly what is needed before shopping
• Step Two
– What is the quality of the product I am using?
• Step Three
– What is the total cost?
• Step Four
– How will the product be used?
• Step Five
– Consider the opportunity cost and make a decision
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
The Right Price
• Jose wants to buy a new bike helmet
– 3 choices
• Bell Trigger
• Giro Atmos
• Schwinn Intercept
• Which helmet should he choose?
• Follow the comparison shopping steps to make a wise
decision
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
Comparison Shopping – Step One
• Step One
– Decide what is needed before shopping
• How will I use this product?
• How long does it need to last?
• What features do I really need?
– Answering these questions will help a person make the best
decision
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
The Right Price – Step One
• How will José use the helmet?
– José will use the helmet when riding his bike to decrease the
chance of injury
• How long should it last?
– The helmet should be durable and last a few years
• What features does he need?
– Strong chin strap and buckles
– Proper ventilation
– High impact absorption
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
Comparison Shopping – Step Two
• Step Two
– What is the quality of the products I am comparing?
• Depends on materials used, craftsmanship and durability
– Look at the product and its packaging carefully
– Ask others who own the same product
– Refer to unbiased testing agencies for more information
» Consumer Reports
» Underwriter’s Laboratories
» Better Business Bureau
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
The Right Price – Step Two
• Bell Trigger - $30
– Price is reasonable
– Has all of the desired features
• Okay chin strap and buckle, okay ventilation, excellent impact absorption
• Giro Atmos - $190
– Price is too high
– Has all of the desired features
• Excellent chin strap and buckle, excellent ventilation, excellent impact
absorption
– José does not race in professional races such as the Tour de France
• Schwinn Intercept - $17
– Price is reasonable
– Has all of the desired features
• Excellent chin strap and buckle system, okay ventilation, excellent impact
absorption
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
Comparison Shopping – Step Three
•Step Three
–What is the total cost?
•Need to consider additional costs other than what is shown on the price
tag
–Example: Clothing that needs to be dry cleaned will cost more over a lifetime
than clothing that can be washed at home
•“Hidden costs” impact decisions and need to be considered carefully
Item
Price
Hidden Cost
Frequency
Wool jacket
$50
Dry cleaning
$15
Every 3
months
Wash at home
$2
Every 3
months
Nylon jacket $60
Total cost after
6 months
$80
$66
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
The Right Price – Step Three
• José has no additional costs to consider
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
Comparison Shopping – Step Four
•Step Four:
–How will the product be used?
•Consider how the product will be used, how often it will be used and what
price is appropriate for the use
–Example: If a product is used once a year, spending more money for high
quality and additional features may not be necessary
–Example: If a product is used everyday, one may be willing to pay more for
higher quality
Item
Price
How will it be Frequency
used?
Total cost
per wear
Custom made
formal gown
$120
Lightly worn
1 night - prom
$120
In store formal
dress
$60
Lightly worn
3 times - prom,
family wedding,
formal dance
$20
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
The Right Price – Step Four
• José will use the helmet everyday
• The helmet will receive moderate wear and tear,
because José does not race or ride on very rough terrain
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
Comparison Shopping – Step Five
• Step Five:
– Consider the opportunity cost and make a decision
• Opportunity cost – something an individual gives up to receive
another such as quality, price or features of a product
– Example: If an individual wants an iPod that holds at least 500 songs,
but it is too expensive, he may have to give up some memory to
purchase an affordable iPod that holds fewer songs.
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
The Right Price – Step Five
• Opportunity costs
– José may have to give up the excellent ratings on all Giro
Atmos features to select a helmet he can afford.
• What is the best option for José?
– Schwinn Intercept
• Provides José with all features he needs and is in his price range.
• The Giro Atmos is a great helmet, but too expensive.
• The Bell Trigger is a good helmet, but the chin strap and buckle
system is not as good at the Schwinn Intercept
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona
2.2.1.G1
Making Good Choices
• Comparison shopping:
–
–
–
–
Helps individuals and families spend money wisely
Helps build a positive financial future
Can reduce costs without cutting back on necessary items
Allows people to save money while meeting needs
© Family Economics & Financial Education – January 2007 – Get Ready to Take Charge of Your Finances – Comparison Shopping Splendor
Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona